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Nordstrom “Debit Card” Versus Bank Debit Card Investigation

Do you have a Nordstrom debit card? Have you had negative experiences with it?

And should Nordstrom even be calling it a debit card? There are some significant differences between these retail cards and real bank debit cards, and some customers have been unpleasantly surprised.

We’re investigating. If you’ve have a bad experience with your Nordstrom debit card, fill out the form on this page and let us know what happened.

If you haven’t had a bad experience yet, here are some things to look out for.

First, these debit cards are not actually linked to your bank account. When you swipe a bank debit card, instant contact is made with your account to verify that you have enough money to cover the transaction. If you don’t have the money, and you have overdraft protection, your bank should refuse the transaction, saving you overdraft fees.

With store debit cards, however, no contact is made with your bank account, so the transaction will go through even when you don’t have the money to cover it. Also, even if you do have overdraft protection with your bank, the store debit card charges may fall into the category of “recurring payments,” that is, transactions that get paid even if they create an overdraft.

Second, the store debit cards are actually more like checks. For one thing, they are processed through different systems than bank debit cards. They can take a longer time to clear, depending on the how soon the store decides to process the charge. A week’s wait is not uncommon. This means that you will have to pay attention and make sure your account still has the money to cover the transaction a week later.

Third, because the cards are not related to your account in the same way that the bank’s own debit cards are, if you do overdraw your account, you will pay more than one fee—one for the store debit card and one for the bank. Depending on the amount each charges, this could be in the range of $60.

Finally, store debit cards do not give you the same protection against fraud that bank cards do. Bank debit cards are often Visa- or MasterCard-branded and have a zero-liability guarantee. Store debit cards don’t offer this. Your liability will depend on how quickly you report the fraud.

In short, customers who think these cards are simply another way to access their bank accounts may be unpleasantly surprised.

Article Type: Investigation
Topic: Consumer
No case events.
Tags: Debit Card, Overdraft Fees